Wall Street falls for fourth day over "fiscal" fears

NEW YORK (Reuters) - Stocks fell for a fourth day in a row on Thursday and a measure of investor anxiety hit its highest in five months after the top Senate Democrat warned a deal to avoid fiscal austerity measures may not be reached by the December 31 deadline.

The comments by Senate Majority Leader Harry Reid just days before the hefty tax hikes and spending cuts go into effect pushed stocks down. The S&P 500 has lost 2.7 percent over the past four days, its worst such run in over a month.

A four-day drop would also mark the S&P 500's longest losing streak in three months as Wall Street wakes up to the possibility that a deal may not be reached until next year.

The CBOE VIX volatility index <.vix>, a measure of investor fear, jumped above 20 for the first time since July, climbing around 4 percent in another sign of growing concern. Investors fear the so-called fiscal cliff could push the economy into recession next year.

The VIX's "recent spike seems to suggest that market participants are bracing for a rather significant uptick in market volatility in early 2013," said Frederic Ruffy, options strategist at WhatsTrading.com.

Stocks in the materials and the financial sectors, which are more vulnerable to the economy's performance, took the brunt of the selling. Shares in Bank of America fell 2 percent to $11.29, while Freeport-McMoRan Copper & Gold fell 1.6 percent to $33.38.

Reid criticized Republicans for refusing to go along with any tax increases as part of a compromise solution with Democrats. Referring to the fiscal cliff, he said: "It looks like where we're headed."

The Dow Jones industrial average <.dji> was down 106.63 points, or 0.81 percent, at 13,007.96. The Standard & Poor's 500 Index <.spx> was down 12.33 points, or 0.87 percent, at 1,407.50. The Nasdaq Composite Index <.ixic> was down 27.48 points, or 0.92 percent, at 2,962.68.

Frank Lesh, a futures analyst and broker at FuturePath Trading in Chicago, said his clients have been delaying trading due to uncertainty about the fiscal cliff, making the year-end period quieter than usual.

"With the added drama in Washington, we have got even more people sidelined," he said. "No one knows how this turns out or how the markets are going to react to it."

President Barack Obama arrived back in Washington from Hawaii to restart stalled negotiations with Congress. House Speaker John Boehner and other Republican leaders were to hold a conference call with Republican lawmakers. The expectation was that lawmakers would be told to get back to Washington quickly if the Senate passed a bill.

Treasury Secretary Timothy Geithner announced the first of a series of measures that should push back the date when the U.S. government will hit its legal borrowing authority - a limit known as the debt ceiling - by about two months.

Economic data seemed to confirm worries about the impact of the fiscal cliff on the economy.

The Conference Board, an industry group, said its index of consumer attitudes in December fell to 65.1 as the budget crisis dented growing optimism about the economy. The gauge fell more than expected from 71.5 in November.

However, the job market continues to mend. Initial claims for unemployment benefits dropped 12,000 to a seasonally adjusted 350,000 last week and the four-week moving average fell to the lowest since March 2008.

But recent signs that the economy is improving have taken a back seat to the political uncertainty.

"The U.S. equity market has not yet adequately responded to a genuinely improving macro backdrop, and is probably held back by uncertainties surrounding the resolution of the 'fiscal cliff'," said Goldman Sachs in a research note.

Marvell Technology Group fell 4.2 percent to $7.09 after it said it would seek to overturn a jury's finding of patent infringement. The stock had fallen more than 10 percent in the previous session after a jury found the company infringed patents held by Carnegie Mellon University and ordered the chipmaker to pay $1.17 billion in damages.

(Reporting by Edward Krudy; Additional reporting by Doris Frankel; Editing by Jan Paschal and Kenneth Barry)

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McElroy has concussion, Sanchez to start for Jets

FLORHAM PARK, N.J. (AP) — The New York Jets' wacky quarterback situation took yet another twist.

Greg McElroy has a concussion — which he didn't reveal until Thursday — and will be replaced by Mark Sanchez as the New York Jets' starting quarterback in the season finale at Buffalo on Sunday.

Coach Rex Ryan walked into his news conference before practice, took the podium and opened with: "You're not going to believe this."

McElroy, preparing to make his second NFL start in place of the benched Sanchez, was lifting weights Thursday morning and started experiencing headaches, Ryan said. McElroy went to the team's training staff and then revealed he was suffering concussion-like symptoms after being sacked 11 times in the Jets' 27-17 loss to San Diego last Sunday.

McElroy and head trainer John Mellody then went to Ryan to tell the coach the news.

"We come to find out that Greg wasn't exactly truthful with our training staff after the game," said Ryan, who acknowledged he was "stunned" to hear it. "He never disclosed that he had symptoms after the game to our trainers. Right now, he's being evaluated for a concussion."

Ryan said there was no way he would play McElroy against the Bills and the third-stringer will "definitely be out." McElroy had been listed on the injury report Wednesday with a mild abdominal strain, but was a full participant in practice and was expected to play without any issues.

"I admire his courage and everything else, but you have to be truthful and I think that's the lesson learned here with the medical staff," Ryan said. "The fact he really wanted to play, I understand the competitive side of Greg and all that, but the most important thing is the health of the players.

"Obviously, I feel fortunate that something like this showed up without him going out there and putting himself in harm's way."

Ryan chose to start Sanchez over Tim Tebow because the team has just two practices and a walkthrough to prepare before the game.

"Mark has had success earlier in the season against Buffalo and he's very familiar with them," Ryan said. "That's the reason I'm going with Mark."

After finding out about McElroy's condition, Ryan spoke with both Sanchez and Tebow to tell them of his decision.

"Obviously, Tim's not happy with that, as you'd expect," Ryan said.

Sanchez was benched for the first time in his four-year career after turning the ball over five times at Tennessee on Dec. 17. McElroy leapfrogged Tebow on the depth chart to start against the Chargers.

The news comes on the heels of some tension between Ryan and Tebow last week, when the popular backup quarterback told the coach he was "disappointed" at not getting the start and wanted to play "regular quarterback." ESPN New York first reported Sunday that Tebow asked out of the wildcat, and a person with knowledge of the situation confirmed that to The Associated Press. But Tebow insisted Wednesday that he did not ask out of doing anything and acknowledged that Ryan might have misinterpreted what he said.

The two met again last Friday to clear the air, and Tebow reiterated that he was willing to do anything the team asked him to do. Tebow will be the No. 2 quarterback on Sunday at Buffalo, and could play — but it won't be as the starter.

"Obviously, he'd like a shot at it," Ryan said, "but with the situation the way it is, it's a short window, really, to get the preparation time in and I just think it's best for our football team."

___

Online: http://pro32.ap.org/poll and http://twitter.com/AP_NFL

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Obama thanks EPA’s Jackson for service on environment

WASHINGTON (Reuters) – President Barack Obama thanked retiring Environmental Protection Agency Administrator Lisa Jackson on Thursday for her service, praising her work on mercury pollution limits, fighting climate change, and helping set new fuel economy standards.

“Under her leadership, the EPA has taken sensible and important steps to protect the air we breathe and the water we drink,” Obama said in a statement.

(Reporting by Roberta Rampton; Editing by Doina Chiacu)

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A gunmaker ripe for an ethical takeover

Several .223 caliber rounds near a Bushmaster XM-15; the manufacturer's owner is putting its gun companies up for sale.

STORY HIGHLIGHTS

• The owner of America's largest gunmaker is putting firm up for sale


• John MacIntosh says billionaires should lead effort to acquire the gun manufacturer


• He says they should change corporate practices to discourage violence


• MacIntosh: One leading company could push gun industry in a more ethical direction

Editor's note: John MacIntosh was a partner at Warburg Pincus, a leading global private equity firm, where he worked from 1994 to 2006 in New York, Tokyo and London. He now runs a nonprofit in New York.

(CNN) -- In the 1970s and '80s, when corporate America was plagued with inefficiency, a new class of financially motivated takeover investor emerged to prey on the fattest in the corporate herd and scare the rest into line.

Today, as pockets of corporate America are plagued with immorality, we need a new class of socially motivated takeover investor to prey on the sociopaths in the corporate herd, turn them around and perhaps scare (or shame) others into line.

John MacIntosh

The upcoming sale by Cerberus Capital of the Freedom Group, the largest gun manufacturer in the United States, is a perfect opportunity to usher in this new era of muscular, socially responsible capitalism:

First, Michael Bloomberg, George Soros, David Geffen and the like should establish a nonprofit SPAC (Special-Purpose-Acquisition-Company) called BidForFreedom.org (BFF) with a mission to reduce needless deaths through gun violence in the United States and encourage the passage of sensible gun control regulations.

They should appoint George Clooney, Angelina Jolie and Matt Damon to the fundraising committee and recruit a loud-mouthed, poison-penned, but good-hearted activist hedge fund titan as chief investment officer (Bill Ackman? Dan Loeb?).

Opinion: Forgotten victims of gun violence

To be credible, BFF will probably need to start with at least $250 million in cash and commitments (no problem given the billionaire status of the sponsors) with additional firepower raised as needed from well-heeled individuals, foundations and through a broad-based Internet solicitation to an outraged-by-Newtown public.

Second, BFF should lobby all public pension funds that are part owners of the Freedom Group (by virtue of their investment in Cerberus) to roll their investment into BFF to reduce the need for outside funding, naming and shaming any unwilling public investors.

Newtown shooter's guns

Third, BFF should pay "whatever it takes" to acquire control of the Freedom Group in the upcoming auction by Cerberus (which has a fiduciary obligation to sell to the highest bidder) and then immediately implement a "moral turnaround" plan under which the Freedom Group:

(i) Appoints a high-profile CEO with impeccable credentials as a hunter and/or marksman who is nevertheless in favor of gun-control.

Opinion: Guns endanger more than they protect

(ii) Elects a new board of directors including representatives from the families of victims killed in Newtown (and/or other massacres perpetrated with Freedom Group weapons), military veterans and trauma surgeons with real experience of human-on-human gunfire, and law enforcement and mental health professionals.

(iii) Operates the business as if sensible gun laws were in place (this may turn out to be a wise investment in future-proofing the company): discontinuing sales of the most egregious assault weapons and modifying others as necessary so they cannot take huge-volume clips; offering to buy back all Freedom Group assault weapons in circulation; micro-stamping weapons for easy tracking; and providing price discounts for buyers willing to go through a background check and register in a database available to law enforcement.

(iv) Voluntarily waives its rights to support the NRA and other lobbying groups.

(v) Creates a fund to compensate those who, despite its best efforts, are killed or wounded by its weapons.

(vi) Agrees that if the effort to provide moral leadership in the weapons industry doesn't succeed within a year, BFF should consider corporate euthanasia, even though it entails a risk of allowing more retrograde manufacturers to fill the void in the market left by the then-deceased company.

Opinion: The case for gun rights is stronger than you think

In the face of horrors like Newtown, BFF would recognize that it's time to take a stand by acknowledging the impossibility of reaching closure after such a monstrous act while an unreconstructed Freedom Group continues to sell a huge volume of guns and ammunition rounds each year even if it is operating under new owners.

Like any Trojan Horse strategy, this is a long shot, but it must be tried. History suggests that only after the first company "turns" will an industry gradually return to the realm of the human (think of big tobacco). And without the tacit agreement, if not the outright support, of at least one important insider, policymakers seem utterly unable to pass tough regulations in the face of the predictable, but withering, assault by industry lackeys shrieking that any such regulation would be "impossible, impractical or too expensive."

In the face of a recalcitrant industry, we have to acknowledge that it is only the market for corporate control -- the real possibility that an outsider will take over one of the companies -- that puts limits on the behavior of board members and executives who, while perhaps decent enough in their family lives, display a limitless tolerance for the "banality of evil" at the office.

Opinion: Not man enough? Buy a gun

We must accept that the conventional, kid-gloves approach to socially responsible investing -- divesting shares in "bad" companies that nevertheless continue to exist -- is too weak an instrument to force change and its well-meaning practitioners too soft to enter the fray when emotionally and politically charged battles need to be fought.

And regardless of the viability of socially motivated takeovers in general, the Freedom Group looks like a great target. Cerberus is a motivated seller, the political macros look favorable, and it's a bite-sized company compared with many of the larger sociopaths in the corporate herd.

I'm even cautiously optimistic that the current impasse over gun regulation is a bad-equilibrium that few consumers actually want, and that a reconstructed Freedom Group, fighting for sensible change as a fifth column from within the industry, might well find that many people -- even a significant portion of the NRA's members -- would buy from a truly responsible (and high quality) gun maker if given the chance.

All in all, it's a pretty exciting deal, so if Mike and George are up for it, count me in.

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The opinions expressed in this commentary are solely those of John MacIntosh.

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Senate Democratic leader warns U.S. poised to go over 'fiscal cliff'

Rana Foroohar, Time magazine's assistant managing editor for business news, talks to Rebecca Jarvis and Jeff Glor about what a drop off the "fiscal cliff" could mean to businesses and consumers.

WASHINGTON (Reuters) - The top Democrat in the Senate warned on Thursday that the United States looks to be headed over the "fiscal cliff" of tax hikes and spending cuts that will start next week if squabbling politicians do not reach a deal.

Majority Leader Harry Reid told the Senate in a speech that "it looks like that is where we're headed.

He called on the Republicans who control the House of Representatives to prevent the worst of the fiscal shock by getting behind a Senate bill to extend existing tax cuts for all except those households earning more than $250,000 a year.

With the House not in session and the clock ticking toward the scheduled January start of tax increases and deep, automatic government spending cuts, Reid offered little hope.

"I don't know time-wise how it can happen now," he said.

Referring to the House run by Speaker John Boehner - the top Republican in Congress - Reid said, "It's being operated with a dictatorship of the speaker, not allowing a vast majority of the House of Representatives to get what they want."

Boehner's failed effort last week to push his own "fiscal cliff" solution through the House was a "debacle," Reid added. He also accused Boehner of delaying "fiscal cliff" action until after he seeks re-election as House speaker on January 3.

"John Boehner seems to care more about keeping his speakership than about keeping the nation on firm financial footing," Reid added.

Reid's pessimistic remarks sent world stocks, the euro and U.S. shares lower.

But Reid's comments may have been more an attempt to spur Republican rivals into action than a definitive prediction that "fiscal cliff" talks will fail.

President Barack Obama arrived back at the White House from his brief vacation in Hawaii to try to restart stalled negotiations with Congress.

Obama made phone calls to congressional leaders from both parties on Wednesday from Hawaii to try to revive the stalled talks to prevent the "fiscal cliff" scenario, which would worry world financial markets and could push the United States back into recession.

In addition, consumer confidence fell to a four-month low in December as the budget crisis sapped what had been a growing sense of optimism about the economy, a report released on Thursday showed.

"People are hearing about (the cliff) and it negatively impacts confidence and investor sentiment and even holiday sales," said Todd Schoenberger, managing partner at Landcolt Capital in New York.

The chances of a last-minute deal - at least one that would prevent tax hikes - remained uncertain, with Republicans and Democrats each insisting the other side move first amid continuing partisan gridlock.

The Senate, controlled by Democrats, was scheduled to meet later on Thursday but on matters unrelated to the "fiscal cliff."

REPUBLICAN CONFERENCE CALL

Boehner and other House Republican leaders, who say they are willing to take up a "fiscal cliff" measure only after the Senate acts on one, were to hold a conference call with Republican House members on Thursday.

The expectation for the call was that lawmakers would be told to get back to Washington within 48 hours to consider anything the Senate might pass.

Weather permitting, that would bring them to Washington with perhaps three days left before the deadline for action. Storms affecting the Midwest, the South and the Northeast played havoc with airline schedules.

The House and Senate passed bills months ago reflecting their own sharply divergent positions on the expiring low tax rates, which went into effect during the administration of Republican former President George W. Bush.

Democrats want to allow the tax cuts to expire on the wealthiest Americans. Republicans want to extend the tax cuts for everyone.

"This isn't a one party or one house problem. This is (that) leaders in both parties in all branches of the government are not willing to make the deal that they know they have to make. Everybody wants their stuff but doesn't want to give up what they don't want to give up," Republican U.S. Representative Steven LaTourette told CNN.

Congress has proven that it can act swiftly once an agreement is reached. Hope persisted that Republicans and Democrats might come up with a resolution before New Year's Day that could at least postpone the impact of the tax hikes and spending cuts while further discussions take place.

Another battle is just over the horizon in late January or early February over raising the debt ceiling, which puts a limit on the amount of money the U.S. government can borrow to pay its debts and can be raised only with the approval of Congress.

Republican leaders have said they will insist on more budget cuts as a condition of raising the ceiling. Without any action, the U.S. Treasury said on Wednesday the government is set to reach its $16.4 trillion debt ceiling on December 31.

The Treasury Department is to begin "extraordinary measures" to buy time. Many analysts believe the government can stave the default date off into late February.

(Additional reporting by Doina Chiacu, Alina Selyukh and Richard Cowan)

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Syria envoy calls for political change to end conflict

BEIRUT (Reuters) - The international envoy seeking a negotiated solution to Syria's 21-month-old conflict said on Thursday political change was needed to end the violence which has killed 44,000 people.

Speaking in Damascus at the end of a five-day trip during which he met President Bashar al-Assad, Lakhdar Brahimi called for a transitional government to rule until elections and said only substantial change would meet demands of ordinary Syrians.

Russian Foreign Minister Sergei Lavrov added to the envoy's call for a peaceful solution when he told a senior Syrian diplomat that only a "broad inter-Syria dialogue and political process" could end the crisis.

Brahimi's push for a transitional government suggested he was trying to build on an international agreement in Geneva six months ago which said a provisional body - which might include members of Assad's government as well as the opposition - should lead the country into a new election.

But the mainly Sunni Muslim Syrian rebels have seized the military initiative since the Geneva meeting in June and the political opposition has ruled out any transitional government in which Assad, from Syria's Alawite minority, plays a role.

Rebel fighters resumed attacks on Thursday against the military base of Wadi Deif, which lies next to Syria's main north-south highway linking Aleppo with Damascus.

The Syrian Observatory for Human Rights, a British-based opposition group which monitors the violence, said rebels also clashed with Assad's forces inside the Minakh air base in Aleppo province after several days of fighting outside its perimeter, although the army still controlled the base itself.

Around the capital, Assad has used artillery and air strikes for weeks to try to dislodge rebels from suburbs which ring the east and south of the city.

"Certainly it was clear in Geneva, and it's even clearer now that the change which is needed is not cosmetic or superficial," Brahimi told a news conference in Damascus before leaving Syria.

"I believe the Syrian people need, want and aspire to genuine change and everyone knows what this means," he said.

"A government must be created ... with all the powers of the state," Brahimi added. He said it should hold power for a transitional period until elections - either for a new president or a new parliament - are held.

"This transitional process must not lead to the ... collapse of state institutions. All Syrians, and those who support them, must cooperate to preserve those institutions and strengthen them," he said.

Radwan Ziadeh of the opposition Syrian National Council dismissed Brahimi's proposal as "unrealistic and fanciful" and said a transitional government could not be built on the same "security and intelligence structure as the existing regime".

TOO SOON FOR COMPLETE PLAN

Russia's Lavrov met Syrian Deputy Foreign Minister Faisal Makdad in Moscow on Thursday. Interfax news agency quoted Lavrov as saying the chances of forging a solution based on the Geneva agreement were decreasing, but it was necessary to keep seeking a peaceful solution because the alternative is "bloody chaos".

"The longer it continues, the broader its scale and the worse (it will be) for everyone," it quoted Lavrov as saying.

Syrian and Lebanese sources said Makdad had been sent to Moscow to discuss details of a peace plan proposed by Brahimi.

Brahimi is due in Moscow on Saturday and said he also expected to have a third joint meeting with U.S. and Russian officials soon following two rounds of talks earlier this month. But he denied the existence of a U.S.-Russian plan to end the crisis and said it was too soon to present a "complete plan".

"What is preferred is that we don't present such a plan until we feel that all sides have agreed to it. That way, implementing it is easy. If that doesn't happen, the other solution could be to go to the (United Nations) Security Council to issue a binding resolution for everyone," he said.

A Russian Foreign Ministry spokesman also denied any joint initiative between Moscow and Washington.

World powers remain divided over what has become an increasingly sectarian struggle, with Sunni Muslim states such as Turkey and the Gulf Arab countries supporting the rebels while Shi'ite Iran and Hezbollah have backed Assad, whose Alawite community has its roots in Shi'ite Islam.

Syria's struggle "has taken a vicious form of sectarian confrontation", Brahimi said. "Syrian officials foremost, as well as the international community, must not let Syria slide down this very dangerous path which threatens the future of Syria."

Deep differences between Western powers opposed to Assad - led by the United States - and Russia and China which have supported his government, have left the U.N. Security Council paralyzed and largely sidelined throughout the conflict.

The political stalemate has helped transform a once-peaceful uprising into a civil war in which rebels have grown in military strength and taken control of swathes of territory in the north, leaving Assad increasingly reliant on air power to curb them.

Activists in the central province of Hama, where rebels launched an offensive last week to extend their control southwards towards the capital, reported on Thursday that rebels shot down a MiG fighter near the town of Morek.

The Syrian Observatory said air force fighters launched three raids on rebel forces around Wadi Deif. The British-based group also reported fierce clashes in the area.

The violence has been accompanied by an escalation in apparently sectarian attacks between the Sunni Muslim majority and minorities such as Assad's Alawite sect, which has largely supported the president.

Activists in Hama uploaded a video of what appeared to be Assad soldiers and shabbiha militia members stabbing the body of a dead man and setting it on fire. The man looked as if he had been beaten to death.

"This is a terrorist, a brother of a whore, one of those trying to destroy the country," one of the men shouted. Two men in camouflage uniforms and army helmets stood by watching. Samer al-Hamawi, an activist from Hama, said rebels in his area found the video on the phone of a soldier they captured this week.

The video emerged a day after Islamist rebel units released footage showing the bodies of dozens of Assad's fighters along a highway near an Alawite town in Hama.

(Additional reporting by Marwan Makdesi in Damascus and Steve Gutterman in Moscow; Editing by Michael Roddy)

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Retailers lead Wall Street lower, "cliff" still a concern

NEW YORK (Reuters) - Stocks fell on Wednesday, dragged lower by retail stocks after a report showed consumers were less enthusiastic about the holiday shopping season than last year.

Many investors said concerns about the "fiscal cliff" kept shoppers away from stores, suggesting markets may struggle to make any ground until next year.

Holiday-related sales rose 0.7 percent from October 28 through December 24, compared with a 2 percent increase last year, according to data from MasterCard Advisors SpendingPulse. The Morgan Stanley retail index <.mvr> skidded 1.8 percent while the SPDR S&P Retail Trust slipped 1.5 percent to 61.24.

"With the 'fiscal cliff' hanging over our heads, it was hard to convince people to shop, and now it's hard to convince investors that there's any reason to buy going into year-end," said Rick Fier, director of trading at Conifer Securities in New York.

President Barack Obama is due back in Washington early Thursday for a final effort to negotiate a deal with Congress to bridge a series of tax increases and government spending cuts set to begin next week, the so-called "fiscal cliff" many economists worry could push the economy into recession if it takes effect.

Coach Inc fell 6 percent to $54.08 as the biggest decliner on the S&P 500, followed by Ralph Lauren Corp , off 4 percent to $144.99. Online retailer Amazon.com fell 3.1 percent to $250.52. Gamestop Corp , Urban Outfitters and Abercrombie & Fitch were also among the S&P's biggest decliners.

The Dow Jones industrial average <.dji> was down 34.16 points, or 0.26 percent, at 13,104.92. The Standard & Poor's 500 Index <.spx> was down 6.57 points, or 0.46 percent, at 1,420.09. The Nasdaq Composite Index <.ixic> was down 18.82 points, or 0.62 percent, at 2,993.78.

Volume was light, with only 2.17 billion shares having traded at midday on the New York Stock Exchange, the Nasdaq and the NYSE MKT. Many senior traders were still on vacation during this holiday-shortened week and major European markets were closed for the day.

Still, Wednesday marked the third day of losses for the S&P 500 in its worst three-day decline since mid-November.

A Republican plan that failed to gain traction last week triggered the S&P 500's recent drop, highlighting the market's sensitivity to headlines centered on the budget talks.

During the last five trading days of the year and the first two of next year, it's possible for a "Santa rally" to occur. Since 1928, the S&P 500 has averaged a gain of 1.8 percent during that period and risen 79 percent of the time, according to data from PrinceRidge.

"While it's unlikely there could be a budget deal at any time, no one wants to get in front of that trade," said Conifer's Fier, who helps oversee about $12 billion in assets. "Investors can easily make up for any gains when there's more action in 2013."

The benchmark S&P 500 Index is up 12.8 percent for the year, and has recouped nearly all of the losses after the U.S. election, when the "fiscal cliff" concerns moved to the forefront. This is the best yearly gain for the S&P 500 since 2010.

Data showed U.S. single-family home prices rose in October, reinforcing the view that the domestic real estate market is improving, as the S&P/Case-Shiller composite index of 20 metropolitan areas gained 0.7 percent in October on a seasonally adjusted basis.

In the energy sector, China's Sinopec Group and ConocoPhillips will research potentially vast reserves of shale gas in southwestern China over the next two years, state news agency Xinhua reported. Conoco's stock fell 0.8 percent to $57.99.

An outage at one of Amazon.com Inc's web service centers hit users of Netflix Inc's streaming video service on Christmas Eve and was not fully resolved until Christmas Day, a spokesman for the movie rental company said on Tuesday. Netflix rose 0.8 percent to $90.97.

(Editing by Dan Grebler)

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Red Sox get All-Star closer Hanrahan from Pirates

BOSTON (AP) — The Red Sox have acquired All-Star closer Joel Hanrahan from the Pittsburgh Pirates in a six-player deal.

Boston completed the trade Wednesday, also receiving infielder Brock Holt. The Red Sox gave up right-handers Mark Melancon and Stolmy Pimentel, infielder Ivan DeJesus Jr. and first baseman-outfielder Jerry Sands.

Over the past two seasons, the right-handed Hanrahan had 76 saves, fourth most in the National League, and a 2.24 ERA. Last season, he was 5-2 with a 2.72 ERA and 36 saves.

Holt spent most of last season at Double-A Altoona, then hit .292 in 24 games with the Pirates, all in September.

Melancon was 0-2 with a 6.20 ERA in 41 relief appearances in his only season with Boston. Pimentel spent the season at Double-A Portland. Sands and DeJesus were obtained in a trade that sent Josh Beckett, Carl Crawford and Adrian Gonzalez to the Los Angeles Dodgers on Aug. 25.

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Climate change: No consensus needed

Lake Cachet II in Aysen, Chilean Patagonia, disappeared because of rising temperatures driven by climate change, experts say.

STORY HIGHLIGHTS

• Tseming Yang: Result of Doha climate change conference less than desirable


• Yang: It's time to abandon the myth that a consensus solution is the best approach


• He says the 25 major carbon emitters should work out an agreement among themselves


• Yang: Smaller, focused discussions may be better than large, U.N.-style gatherings

Editor's note: Tseming Yang, former deputy general counsel at the Environmental Protection Agency, is professor of law at Santa Clara University Law School.

(CNN) -- The Doha climate change conference this year was the most significant in nearly 20 years of gatherings under the U.N. Framework Convention process aimed at staving off future global warming disaster.

Since carbon dioxide emission limits agreed to under the 1997 Kyoto Protocol were to expire at the stroke of midnight on December 31, 2012, it was critical that the international community agreed to extend those obligations and to continue talks about future emission cuts.

But the outcome fell far short of what will be necessary to keep the world's average temperature from rising more than 2 degrees Celsius in the foreseeable future.

Under the Doha arrangement, 17 of the 25 biggest carbon emitting countries (including China, the United States, Russia and India) did not commit to any legally binding emission limits. The countries that did agree to extend and deepen their Kyoto emission reductions, including the European Union, Australia and Eastern Europe, make up only about 15% of the world's emissions. That seems like a rather meager return on the investment of time and effort over the past years.

But there is one silver lining.

The world's top 20 carbon emitters together make up about 77% of emission and account for about 4.3 billion people, which is about 62% of the global population. The remaining 170 or so countries account for just over 20% of emissions.

As often is the case, these negotiations over climate have come to symbolize epic David and Goliath struggles pitting poor developing countries against recalcitrant government officials from rich countries. Lobbying efforts, shaming tactics, and staging public demonstrations have been the slingshots of choice. One result is that more people are paying attention to environmental issues.

Nonetheless, it is time to abandon the myth that a consensus solution is necessarily the best approach. The unfortunate reality is that little can get done right now. It's like having hundreds of cooks with hundreds of different recipes attempting to prepare one meal in the same small kitchen. After two decades of hard work, it is time to consider reducing the number of cooks.

A better alternative to a United Nations-style conference would be for the 25 major emitters to come to an agreement just among themselves about their mutual commitments to deal with climate change effectively.

In other words, get the 25 cooks to work together on the main meal. The hundreds of other cooks ought to step out of the kitchen.

Some smaller, focused discussions have already started, such as in the Major Economies Forum. Imagine what kind of deals on cutting emissions would be possible just among China, India and the United States -- the top three emitters in the world respectively. Imagine a deal involving emission sources in China, which has some of the world's most polluting coal-fired power plants, and California, which is on a course to become one of the most stringently controlled states in carbon emissions.

Of course, there are no guarantees for success. But discussions within such a smaller group would allow government leaders to confront the realities of climate change and engage in direct horse-trading without the static of thousands of other voices desiring to load their issues into the deal.

Let's face it -- we are way beyond the time for finding an ideal solution. Every year the world waits to take further concrete steps to cut emissions, the atmosphere will be loaded with millions of tons more carbon dioxide that will stay for a century. And the job of limiting global warming to 2 degrees Celsius will be more out of reach.

At the best, gatherings like the one in Doha dangle a tantalizing mirage of achieving a sustainable future. At the worst, they give cover to governments that would rather avoid the hard choices they ultimately will have to make.

After one more expensive and time-consuming round of talks, it's time to be honest with what can really be accomplished in these U.N.-style gatherings.

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The opinions expressed in this commentary are solely those of Tseming Yang.

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One of Chicago's most feared mobsters dies in prison

Convicted mob hitman Frank Calabrese Sr. has died in a federal prison in North Carolina.

Calabrese, serving a life sentence, died on Christmas at the Butner Federal Correctional Complex, according to a spokesman for the Bureau of Prisons. He was 75.

Calabrese's body was taken to the medical examiner's office, where it will be examined this afternoon, according to Kevin Gerity, autopsy manager for the office. Gerity said an autopsy or an external examination will be conducted.

Calabrese, one of Chicago’s most feared mobsters. was convicted in 2007 during the Operation Family Secrets trial.

A federal jury held Calabrese and two other aging mobsters -- Joseph "Joey the Clown" Lombardo and James Marcello -- responsible for 10 murders after a trial that exposed the seedy inner workings of organized crime in Chicago.
Calabrese,  a portly, bearded loan shark who according to witnesses doubled as a hit man, was found responsible for seven mob murders. Witnesses, including his brother Nicholas Calabrese, said he strangled victims with a rope, then cut their throats to make sure they were dead.

Marcello, described by prosecutors as a top leader of the Chicago Outfit, was held responsible for the June 1986 murder of Tony "The Ant" Spilotro, the Chicago mob's longtime man in Las Vegas and the inspiration for the Joe Pesci character in the movie "Casino."

The Family Secrets trial was the biggest organized crime case in Chicago in years. The defendants were convicted of operating the Chicago Outfit as a racketeering enterprise.

They allegedly squeezed "street tax," similar to protection money, out of businesses, ran sports bookmaking and video poker operations as well as engaged in loan sharking. And they allegedly killed many of those who they feared might spill mob secrets to the government -- or already were doing so.

The cases went unsolved for decades.

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